SAN FRANCISCO, Nov 14 (Reuters) – Epic Games on Monday argued to a three-judge federal appeals panel to overturn portions of a lower court antitrust ruling that largely favored Apple Inc (AAPL.O) and its App Store payment business.
The “Fortnite” creator had sued Apple in 2020 alleging that the iPhone maker unlawfully required software developers to pay it commissions of up to 30% on in-app purchases.
After a three-week trial last year, a judge stopped short of dubbing Apple an “illegal monopolist” and found that Epic had failed to prove that the privacy and security benefits of the commissions and related policies outweighed costs to consumers.
On Monday, the U.S. Ninth Circuit Court of Appeals panel quizzed attorneys from Epic, Apple and the U.S. Justice Department about whether the trial judge properly compared those consequences.
Epic acknowledged it had not brought sufficient evidence on some points. Apple reiterated that the developer fees help it fund review of apps to ensure consumers are not exposed to fraudulent, pornographic or privacy-intrusive apps.
Key to the trial judge’s ruling was its finding that Apple’s contracts with developers to use its App Store did not violate antitrust laws because they were non-negotiable agreements – developers either agreed or could not use the App Store. Epic argues that such standard agreements are still subject to antitrust laws.
Other large technology companies use similar agreements to guard access to their systems. The Department of Justice, which has been investigating Apple and other tech companies, joined the Epic appeal because it said the lower court ruling could “significantly harm antitrust enforcement beyond the specific context of this case.”
The lower court also had found that Apple violated its home state of California’s unfair competition law and ordered the company to let developers tell users how to make app purchases outside of its proprietary payment system. The appeals panel can reconsider that order.
Reporting by Paresh Dave in San Francisco; Additional reporting by Stephen Nellis in San Luis Obispo County, California; Editing by Rosalba O’Brien and Stephen Coates
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